Summary
In February the Euro Area economic sentiment and the consumer confidence indicators maintained the downward movement of the six previous months.
On the domestic side, the information already available for January and February points to a deceleration of the economic activity, after the 2.0% GDP growth observed in the 4th quarter 2007 (0.3 percentage points more than in the previous quarter). The economic climate indicator stabilized in February, after diminishing in the two previous months, and the economic activity indicator decelerated in January. The investment indicator points to a significant deceleration of this variable, due to the negative behaviour of all its components. The slowdown signs are less evident for private consumption. In January the consumption indicator remained at the same level of the previous month. In the first two months of the year it was observed simultaneously the maintenance of the downward trend in the consumer confidence indicator and high year-on-year growth rates in the sales of passenger vehicles. Most of the supply side indicators point to a deceleration of the economic activity with the turnover and production indices presenting lower year-on-year change rates than in December. In nominal terms, a slight acceleration of imports (0.5 p.p.) and a deceleration of exports (-1.2 p.p.) were observed in January.
Year-on-year inflation stabilized in 2.9% in February. Inflation, considering the HIPC, has been below the Euro Area level since September.